Formula One’s answer to sport’s big challenge
One of the biggest fears in sport is how revenues will hold up amid the transition from traditional TV to digital media. Old-fashioned broadcast fees still feed sport but young people prefer streaming, social media, podcasts and video games.
Three quarters of “engaged” sports fans aged 55 and up watch live sports on a TV channel, according to pollster YouGov. That drops to just 31 per cent among those aged 18-24, more of whom prefer watching clips than entire games. You can read more on what those numbers mean for football in this week’s Top Line column.
But the recent growth of Formula 1’s direct-to-consumer product suggests there’s a third way.
F1 TV Pro is essentially an app that allows viewers to watch live races on a screen of their choosing. Some viewers of the data-heavy motorsport follow F1 on more than one screen, for instance watching the main race on TV and a driver’s onboard camera on F1 TV Pro via their phone.
It’s not currently available in the UK because Sky pays a premium for exclusivity and promotes the sport in a big way.
But in markets such as India, where F1 doesn’t have a traditional broadcast deal, F1 TV Pro is the only legitimate way to follow the sport.
F1 TV Pro can be downloaded via the Apple and Android app stores but in other markets the traditional telecoms company or broadcaster helps distribute the product, highlighting how traditional sports partners have a role to play in the new world.
The growth of F1 TV Pro last year stood out because Liberty Media reported 1.54bn cumulative TV viewers in 2022, a slight decrease from 1.55bn the previous year.
The decrease wasn’t exactly a surprise considering that 2021 marked one of the greatest title races of all time, with Red Bull’s Max Verstappen beating Mercedes driver Lewis Hamilton in controversial circumstances on the final day of the season. By contrast, Red Bull has dominated ever since.
Accounts for Formula One Digital Media, the entity that houses the more basic F1 TV and the Pro version, showed that the service made more than $47mn in revenues in 2021, up from $19mn the prior year.
Total media rights revenue amounted to $860mn in 2021, up from $670mn in 2020, a season disrupted by the pandemic.
In 2022, F1’s media rights revenue increased to $936mn. The company is yet to disclose how much of that was down the F1 TV Pro, but JPMorgan analyst David Karnovsky has said it was a “bigger driver . . . than we previously initially appreciated”.
The question for sport is if the hybrid approach is part of the transition or if F1 TV Pro is the future.